Coke Woos Consumers With Smaller, Cheaper Package Sizes

ATLANTA -- Coca-Cola Co. is extending its lineup with smaller package sizes at lower price points aimed at consumers watching their budgets and their waistlines.

This week, the beverage giant is expected to announce the launch of a 12.5-fl.oz. bottle that retails for 89¢ (round off to a 90¢ vend price). It will join Coke's 16-fl.oz., 99¢ bottle that rolled out nationwide in convenience stores last year as an alternative to the pricier 20-fl.oz. bottle, according to The Wall Street Journal.

Coca-Cola is also hoping to spur sales by reducing the suggested retail price on its recently introduced eight-pack of 7.5-fl.oz. 100-calorie Coke "mini'' cans in supermarkets by about 20% to $2.99.

Coke is banking on boosting revenue and profit with its sized-down packages despite the lower volume per sale. While the smaller containers carry lower sticker prices, the consumer pays more per ounce. At the same time, the company is raising prices on larger bottles and cans, WSJ reported.

PepsiCo, the No. 2 beverage company, is following Coke's strategy as both companies vie to regain soda sales in a market where consumer health concerns and economic pressures curtailing their spending have led to a six-year decline in consumption. PepsiCo recently added 16-fl.oz. bottles to its repertoire, along with a 1.5-liter bottle to compete with the 1.25-liter bottle Coke introduced last year.

Coke's head start may be paying off. Its share of the soda market in U.S. stores rose 1.1 percentage points to 34.3% in the first half of this year, while PepsiCo's slipped 0.2 percentage point to 32.8%, according to Beverage Digest, a trade publication and data service.